Azure Reserved Instances - Step-by-Step Execution

Process Flow - Azure Reserved Instances

Start: Need VM

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Check VM usage predictability

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Buy Reserved

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Apply RI Discount

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VM runs with lower cost

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End

This flow shows deciding to buy an Azure Reserved Instance (RI) when VM usage is predictable, applying the discount, and running the VM at a lower cost.

Execution Sample

Azure

1. Predict VM usage for 1 year
2. Buy 1-year Reserved Instance
3. Deploy VM with RI applied
4. VM runs with discount
5. Monitor cost savings

This sequence shows buying and applying an Azure Reserved Instance to save costs on a virtual machine.

Process Table

Step	Action	Condition/Check	Result/Effect
1	Predict VM usage	Is usage steady for 1 year?	Yes, usage is steady
2	Buy Reserved Instance	Select VM size and term	Reserved Instance purchased for 1 year
3	Deploy VM	Apply RI discount automatically	VM runs with RI discount
4	VM runs	Billing applies RI rate	Cost is lower than pay-as-you-go
5	Monitor cost	Check billing reports	Savings confirmed
6	End	Term ends or usage changes	Decide to renew or switch pricing

💡 Process ends when RI term expires or usage pattern changes

Status Tracker

Variable	Start	After Step 2	After Step 3	After Step 4	Final
VM Usage Predictability	Unknown	Confirmed steady	Confirmed steady	Confirmed steady	Confirmed steady
Reserved Instance Purchased	No	Yes	Yes	Yes	Yes
VM Running Cost	Pay-As-You-Go rate	Pay-As-You-Go rate	RI discounted rate	RI discounted rate	RI discounted rate
Cost Savings	0	0	Applied	Confirmed	Confirmed

Key Moments - 3 Insights

Why do we check VM usage predictability before buying a Reserved Instance?

Because Reserved Instances save money only if the VM runs steadily for the reserved term, as shown in execution_table step 1.

Does buying a Reserved Instance immediately reduce VM cost?

No, the discount applies only when the VM is deployed and matches the RI, as shown in execution_table step 3.

What happens when the Reserved Instance term ends or usage changes?

You must decide to renew or switch to pay-as-you-go pricing, as shown in execution_table step 6.

Visual Quiz - 3 Questions

Look at the execution_table, at which step is the Reserved Instance actually purchased?

A Step 1

B Step 3

C Step 2

D Step 4

💡 Hint

Check the 'Action' column for when the Reserved Instance is bought.

According to variable_tracker, what is the VM Running Cost after Step 3?

A RI discounted rate

B Zero cost

C Pay-As-You-Go rate

D Unknown

💡 Hint

Look at the 'VM Running Cost' row under 'After Step 3' column.

If VM usage is not steady, what does the concept_flow suggest you should do?

A Buy Reserved Instance anyway

B Use Pay-As-You-Go pricing

C Stop using VM

D Buy multiple Reserved Instances

💡 Hint

Refer to the decision branch in concept_flow after checking usage predictability.

Concept Snapshot

Azure Reserved Instances (RI) let you save money by pre-paying for VM usage.
Check if your VM usage is steady for 1 or 3 years.
Buy an RI matching your VM size and region.
Deploy VM to automatically get discounted rates.
Monitor billing to confirm savings.
Renew or switch pricing when RI term ends.

Full Transcript

Azure Reserved Instances help reduce costs by committing to use a virtual machine for a set time, usually 1 or 3 years. First, you check if your VM usage is steady and predictable. If yes, you buy a Reserved Instance for that VM size and term. When you deploy the VM, Azure applies the RI discount automatically, lowering your running costs compared to pay-as-you-go pricing. You monitor your billing to see the savings. When the RI term ends or your usage changes, you decide whether to renew the RI or switch back to pay-as-you-go pricing.